The highest share of home sellers cut their asking price in a year-and-a-half this May, as rising costs put a damper on demand.
A new report from Redfin indicated that nationwide, 6.4% of home sellers cut their asking price during the four weeks ending May 26 – the highest share since Nov. 2022.
In the last week alone, the median asking price for a home dropped roughly $3,000 to $416,623, representing the first decline in six months.
This was accompanied by aging inventory, with the typical number of days active listings have been on the market hitting a median 46 days, rising year over year in May for the first time in eight months.
“The market is slower than usual, but well-maintained properties listed for under a million dollars still get multiple offers,” said Christine Chang, a Redfin Premier agent in the Bay Area. “People who are buying right now are typically doing so because they’re having a baby or looking for a more family-friendly home. My advice for those buyers is to be open-minded: Consider single-family homes that are a bit outdated but don’t need major renovations, and/or homes in lesser-known, non-trendy neighborhoods. That type of home tends to sit on the market longer, and buyers may be able to avoid competition and get a home for asking price instead of engaging in a bidding war. Buyers who can get by with less space should consider a condo; they’re relatively unpopular right now and many are going under asking price.”
Even though 7.8% more new listings hit the market than during the same period last year, listing growth has been losing momentum for the last few months, leaving buyers with fewer homes to choose from than the typical month of May provides.
Redfin analysts predict sales price growth will soften in coming months, given those metrics, as persistently high mortgage rates turn off homebuyers.
For now, the median home sale price is up 4.3% year over year to another record high, though sale prices are a lagging indicator because they’re typically negotiated at least a month before a deal closes.
Pending sales are down 3.4% year over year, on par with declines over the last month, and mortgage purchase applications are sitting near their lowest level in six months.
